Stocks are up, and greed is back

CNNMoney's Fear and Greed Index has swung from fear to greed in just a week.

With stocks back in record territory, investors are getting greedy again.

CNNMoney's Fear & Greed Index shot back into Greed mode Thursday for the first time since late May, as the Dow and S&P 500 rallied above their record closing highs from May, and the Nasdaq climbed to its highest level since October 2000.

The return of the bull comes as investors have started feeling more confident about future policy decisions from the Federal Reserve.

During a speech in Massachusetts Wednesday evening, Fed chairman Ben Bernanke reassured investors that a "highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy."

Investors grew jittery in late May, after Bernanke hinted that the central back could begin pulling back on its $85 billion-per-month bond buying program later this year.

Stocks began a choppy and volatile descent as the thought of no stimulus spooked investors. At the same time, the Fear and Greed Index swayed between fear and extreme fear.

But top central bankers, including the chairman, have been going to great lengths to calm investors, reiterating time and time again that any scaling back of stimulus will be tied to significant improvements in the economy. Those comments have helped both stocks and sentiment to rebound.

>

While it looks like stocks are headed back up, don't expect a smooth ride.

"We expect stock market gains to be accompanied by more volatility than experienced in the first half of the year," said Jeffrey Kleintop, chief market strategist at LPL Financial.

Hibah Yousuf is a reporter at CNNMoney, where she covers stocks, bonds, commodities and currencies trading across the globe, as well as corporate earnings and other markets-related news. Prior to joining the site in 2009, she interned at Money Magazine.